Monday March 2, 2009
Navivest

Following overseas cues, the U.S. stock market is looking to start the new month significantly to the downside, on concerns over the economy and the financial sector. The Dow Jones Industrial Average is currently indicated to open down about 150 points, from Friday’s close of 7,062.93, which was a 1.7% or 119.15 point decline from the day prior.

Stocks fell on Friday on news that the nation’s GDP, which measures total goods and services produced, declined by 6.2% in the fourth quarter. This was much worse than the 5.4% contraction that economists were forecasting.

This morning insurance giant AIG (AIG), which is currently on life support and being kept alive by the government, just reported that in the fourth quarter of 2008, it lost $61.7 billion, which translates into a per share loss of $22.95 on a diluted basis.

For the full year, the company lost $99.3 billion or $37.84 per share. This compares to a 2007 fourth quarter net loss of $5.3 billion or $2.08 per diluted share and net income of $9.3 billion or $3.58 per diluted share for full year 2007.

Over the weekend, Warren Buffet reported that for the fourth quarter 2008, his company, Berkshire Hathaway (BRK.a) posted net profits of $117 million, or $76 per share. This was a 96% decline from the $2.95 billion or $1,904 per share in 2007 Q4 profits that the company posted.

To the extent that he is one of the most successful investors in the country, if he can’t get it right, then that’s cause for alarm. Throwing fuel in the flames, the “Oracle of Omaha’ whose words are closely followed by the investment community, stated that the economy is in shambles.

On December 31, 2008, the Dow closed at 8,776.39. Through Friday February 27, the index has lost 1713.46 or 19.52%. With Friday’s losses, the Dow is now down three days in a row and looking to add to the string of losses today.

Tags: stock market  aig  berkshire hathaway  stock market futures